83 FR 3275 - General Services Administration Acquisition Regulation (GSAR); Federal Supply Schedule, Order-Level Materials
GENERAL SERVICES ADMINISTRATION Federal Register Volume 83, Issue 16 (January 24, 2018)
Federal Register Volume 83, Issue 16 (January 24, 2018)
| Page Range | 3275-3281 | |
| FR Document | 2018-01232 |
[Federal Register Volume 83, Number 16 (Wednesday, January 24, 2018)] [Rules and Regulations] [Pages 3275-3281] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-01232] ======================================================================= ----------------------------------------------------------------------- GENERAL SERVICES ADMINISTRATION 48 CFR Parts 515, 538, and 552 [GSAR Case 2016-G506; Docket No. 2016-0016; Sequence No. 1] RIN 3090-AJ75 General Services Administration Acquisition Regulation (GSAR); Federal Supply Schedule, Order-Level Materials AGENCY: Office of Acquisition Policy, General Services Administration. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) to clarify the authority to acquire order-level materials (OLMs) when placing an individual task or delivery order against a Federal Supply Schedule (FSS) contract or FSS blanket purchase agreement (BPA). OLMs are supplies and/or services acquired in direct support of an individual task or delivery order placed against an FSS contract or BPA, when the supplies and/or services are not known at the time of contract or BPA award. DATES: Effective: January 24, 2018. FOR FURTHER INFORMATION CONTACT: Ms. Leah Price, GSA Acquisition Policy Division, Senior Policy Advisor, at [email protected]. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite GSAR Case 2016-G506. SUPPLEMENTARY INFORMATION: I. Background GSA's Federal Supply Schedule (FSS) program, commonly known as the GSA Schedules program or Multiple Award Schedule (MAS) program is the Government's most used commercial-item purchasing channel, accounting for approximately $33 billion of Federal contract awards in fiscal year 2016 (not including the VA Schedules). GSA Schedules provide a convenient and effective option for both ordering activities and Schedule contractors. Ordering activities enjoy simplified ordering procedures and reduced prices, while Schedule contractors connect with federal business quickly and easily. Additional features of the Schedules program, including Blanket Purchase Agreements (BPAs) and Contractor Team Arrangements (CTAs), greatly enhance the flexibility of the program. These features offer:Additional price discounts for ordering activities; Expanded opportunities for contractors; Elimination of redundant effort, with a single contracting vehicle fulfilling complex or ongoing needs; Reductions in administrative time and paperwork; Expanded business opportunities for socioeconomic groups; and Help for ordering activities wishing to reach socioeconomic goals. The Schedules Program supports Federal Agencies' missions by providing access from simple commodities such as pens and pencils to complex services such as IT Modernization. Authority for This Rulemaking 41 U.S.C. 152(3)(B) deemed FSS procedures to meet the Competition in Contracting Act (CICA) requirement of full and open competition as long as participation has been open to all responsible sources; and orders and contracts under those procedures result in the lowest overall cost alternative to meet the needs of the Federal Government. GSA has long recognized the lowest overall cost alternative does not just include the actual price paid to the contractor, but also the administrative cost of conducting the acquisition. For example, GSA charges a low transactional fee for orders to be placed against a Schedule and the efficiency of the simplified acquisition process translates to time and cost savings. The administrative cost to acquire similar goods or services combined with possible fees on a new contract duplicates efforts resulting in a less efficient way to acquire those goods or services. This is also consistent with the Federal Acquisition System and its principle to minimize administrative operating costs (FAR 1.102(b)(2)). The Federal Acquisition System is designed to deliver the best value product or service to the customer in terms of cost, quality, and timeliness. By lowering the cost to conduct the acquisition, and simplifying the acquisition process, administrative savings can be achieved. II. Discussion of the Proposed Rule The proposed rule published in the Federal Register at 81 FR 62445 on September 9, 2016 and addressed the importance of providing the same flexibility for the FSS program that is currently authorized for other indefinite delivery, indefinite quantity (IDIQ) vehicles, which will help reduce contract duplication and the associated administrative costs and inefficiencies. GSA also discussed how the proposed changes would also reduce transaction costs by eliminating the need for additional contracts for ancillary work. The rule aimed at achieving parity between the FSS programs and other IDIQs, in terms of acquiring OLMs. The rule presented two price protections found in all IDIQ contracts which authorized OLMs plus three additional price protections not generally found in such contracts. All IDIQ contracts authorizing OLMs include two key government protections: 1. The contracting officer must determine the prices are fair and reasonable. 2. FAR Clause 52.212-4 Alternate 1 paragraph (i)(1)(ii) which addresses: a. Paying for commercial items at prices not to exceed established catalog or market price b. Conditions for reimbursing contractors for actual cost c. Procedures for handling indirect cost reimbursement The three unique protections GSA included in the proposed rule were: 1. The requirement to submit three quotes; 2. Limitation of percentage of order which can be OLM; and 3. Establishment of an OLM SIN, which requires reporting of OLM. Commenters noted that due to these three unique GSA protections, the proposed rule did not fully meet the parity objective. In the final rule, GSA maintained these three unique protections while simplifying and narrowing the three quote requirement. This is more fully discussed in the Analysis of Public Comments section. GSA agrees that this leaves the final rule close to, but not at full parity. However, the requirements are currently the best available means to ensure price reasonableness and provide confidence to customers when using the new OLM authority on Federal Supply Schedules. This is more fully discussed in the Analysis of Public Comments section. These price protections, when combined with the current design of the FSS program, are sufficient to ensure the Federal Supply Schedules continue [[Page 3276]] to offer the lowest overall cost alternative. Other key features of the FSS program include ordering procedures designed to promote competition, and, at certain dollar levels to increase competition, an existing deviation to FAR 51 (which authorizes GSA contractors, performing on a time-and-material or labor-hour basis, to purchase ancillary supplies and services from Schedule contractors or process requisitions through the GSA Global Supply Program) the Acquisition Gateway, (a logical home for a future GSA effort to publicize OLM best practices), and ongoing category management work to improve the acquisition of services and IT, all work together, with this final rule, to ensure Federal Supply Schedules remain open to all and are the lowest overall cost alternative. A. Summary of Significant Changes Four respondents submitted comments on the proposed rule. The General Services Administration has reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows: This final rule makes the following significant changes from the proposed rule: Eligible Schedules: GSAR 538.7201 has been revised to reference a website that lists the Federal Supply Schedules authorized to include OLMs. Indirect Costs: The instructions to contracting officers in GSAR 538.7204 subparagraph (a)(3) have been revised to allow for indirect costs, consistent with the procedures in FAR clause 52.212-4 Alternate I(i)(1)(ii)(D)(2). Clause Text: GSAR clause 552.238-82, Special Ordering Procedures for the Acquisition of Order-Level Materials, has been revised as follows: Vendors must obtain three quotes for each order-level material above the simplified acquisition threshold, for the ordering activity contracting officer to determine OLM prices fair and reasonable. Contractors with an approved purchasing system per FAR 44.3 are exempt from the three quote requirement. Provides procedures for the ordering activity contracting officer to make a determination that all indirect costs associated with OLMs are fair and reasonable. Clarifies travel costs are governed by FAR 31.205-46 and exempts travel OLMs from certain requirements, including the \1/3\ of the order threshold, price reasonableness determination requirement, and GSAR clause 552.238-74 Industrial Funding Fee and Sales Reporting. Clarifies the ordering activity contracting officer is required to follow the procedures found at FAR 8.404(h)(3)(iv) prior to an increase in the ceiling price of OLMs. B. Analysis of Public Comments GSA received four comment letters in response to the proposed rule.\1\ All comments filed were considered, many of which led to the changes described in the previous section.\2\ Public comments are grouped into categories in order to provide clarification and to better respond to the issues raised. --------------------------------------------------------------------------- \1\ See GSAR Case 2016-G506; Docket 2016-0016; Sequence 1 [81 FR 62445 (Sep. 9, 2016)]. \2\ See Section II.A, Summary of Changes Made at the Final Rule Stage. --------------------------------------------------------------------------- 1. Three Quote Requirement Comment: Two commenters recommended GSA eliminate the proposed requirement for contractors to submit three quotes to the ordering activity contracting officer to determine price reasonableness.\3\ One commenter stated the requirement would be burdensome and unnecessary; that commenter also asked if the lowest priced quote would be the basis for the price evaluation.\4\ The other commenter asked if the same three quotes could be used for multiple orders.\5\ --------------------------------------------------------------------------- \3\ See e.g., CGP and ITAPS Letter and DM Letter. \4\ See CGP and ITAPS Letter. \5\ See DM Letter. --------------------------------------------------------------------------- Response: GSA partially agreed with two of the commenter's recommended alternatives and revised and narrowed the three quote requirement for each OLM. First, the special ordering procedures at GSAR 552.238-82(d)(7)(i) has been revised to instruct contractors to obtain three quotes for each OLM above the simplified acquisition threshold. The three quotes are not submitted with the offer, but should be maintained in the contractor's file and are still subject to audit. The threshold has been increased from the micro-purchase threshold to the simplified acquisition threshold to be consistent with ordering procedures at FAR Subpart 8.4. Second, paragraph (d)(7)(i) has been revised to exempt contractors that have an approved purchasing system determined by a Contractor Purchasing System Review (CPSR) per FAR 44.3 from the three quote requirement. The contractor shall follow its purchasing system requirement instead of the three quote requirement identified in paragraphs (d)(7)(i)(A)-(C). The ordering activity contracting officer will make the determination that prices for all OLMs are fair and reasonable and may make this determination based on relevant pricing available, including the direct competition of offers received in response to their solicitation. Lastly, the addition of the OLM authority to the authorized Schedules provides an added flexibility through which industry can provide complete procurement solutions through the FSS program, reducing the need for contractors to prepare solutions for separate contracts. The reduction results in managing fewer open market contracts and decreasing proposal costs. 2. OLM Threshold of 33 Percent Comment: Two commenters recommended GSA remove the requirement that OLMs be limited to 33 percent of the order per the special ordering procedures at GSAR 552.238-82(d)(4).\6\ One commenter stated the 33 percent threshold was arbitrary and may be difficult to maintain over time, noting that other direct cost (ODC) Special Item Numbers (SINs) currently used in the Schedules program have no such limits.\7\ The second commenter also stated the threshold was arbitrary and will invoke unnecessary consequences, citing examples where travel costs may exceed the OLM threshold.\8\ --------------------------------------------------------------------------- \6\ See e.g., CGP and ITAPS Letter and Jalad Letter. \7\ See CGP and ITAPS Letter. \8\ See Jalad Letter. --------------------------------------------------------------------------- Response: GSA agrees that travel should not be included in the limitation and made this change in the final rule. However, GSA does not agree that the 33 percent cap on OLMs is arbitrary, although to make it easier to understand and remember, it is revising the threshold to 33.33 percent or \1/3\ of the order. 41 U.S.C. 152(3)(B) deemed FSS procedures to meet the Competition in Contracting Act (CICA) requirement of full and open competition as long as participation has been open to all responsible sources; and orders and contracts under those procedures result in the lowest overall cost alternative. This statutory language is not found in other IDIQ contracts. GSA determined that to meet the statutory requirement, additional levels of protection were required, one of which was a cap on order level materials. Having determined there must be a cap, GSA's next consideration is around the appropriate level. In large scale Engineering Services and IT buys, GSA is aware of customer agencies adding additional controls once materials top 10 percent. On the other hand, in advertising services, media time, a [[Page 3277]] single OLM, can easily exceed 25 percent of the cost of an order. To provide a reverse example, as a result of industry feedback associated with the Maximum Order Threshold in installation services for systems furniture, GSA learned that installation services often top 25 percent of the cost of the furniture. Thus, GSA concluded: (1) There has to be a cap, (2) the cap should be above 25 percent, and (3) the cap has to be below 50 percent, to ensure the principle purpose of the order was to acquire a service or product off of the Federal Supply Schedule. While any number between 26 percent and 49 percent would fit, GSA also concluded that to be consistent the Federal Supply Schedules program, the cap has to be clear, has to be easy to explain to customer agencies, has to be easy for contractors to understand and follow, has to be easy for GSA to conduct needed training, and has to be easy for everyone to remember. There is only one number between \1/4\ and \1/2\ which meets all these criteria: \1/3\. Thus, GSA set the OLM cap at \1/3\, or 33.33 percent. 3. Travel Costs Comment: Two parties submitted comments relating to the application of certain OLM requirements and procedures to travel costs.\9\ One commenter asked if the OLM ordering procedures would contain the same flexibility as Schedule clause C-FSS-370 Contractor Tasks/Special Requirements.\10\ The other commenter stated applying the proposed OLM procedures to travel costs would be burdensome on ordering agencies.\11\ --------------------------------------------------------------------------- \9\ See e.g., CGP and ITAPS Letter and Jalad Letter. \10\ See CGP and ITAPS Letter. \11\ See Jalad Letter. --------------------------------------------------------------------------- Response: The special ordering procedures at GSAR clause 552.238-82 have been revised to allow the same flexibility as Schedules clause C- FSS-370 Contractor Tasks/Special Requirements. For the authorized Schedules allowing for OLMs, the GSAR clause 552.238-82 Special Ordering Procedures for the Acquisition of Order-Level Materials will replace the travel portion (b) of the Schedules clause C-FSS-370 Contractor Tasks/Special Requirements. Specifically, the final rule clarifies travel OLMs will continue to be handled in accordance with FAR Part 31.205-46 and exempts travel OLMs from the requirements in clause 552.238-74 Industrial Funding Fee and Sales Reporting, the 33.33 percent threshold, and the price reasonableness determination in subparagraph (d)(7) of GSAR clause 552.238-82. However, if an order includes both travel and non-travel OLMs, the non-travel OLMs in the order must comply with all OLM requirements in GSAR clause 552.238-82. 4. Applicability of GSAR Clause 552.238-74 Industrial Funding Fee and Sales Reporting Comment: One party provided comments relating to the applicability of GSAR clause 552.238-74 Industrial Funding Fee and Sales Reporting on OLMs.\12\ --------------------------------------------------------------------------- \12\ See CGP Letter. --------------------------------------------------------------------------- The basic version of the clause requires contractors to report Schedule sales within 30 days after the end of each quarter. Alternate I of the clause requires contractors to report transactional data within 30 days after the end of each month. Both versions of the clause require contractors to remit IFF payments within 30 days after the end of each quarter. The IFF, currently set at 0.75 percent, is charged to ordering activities for the use of the Schedules program but is remitted by the contractor; the amount of IFF due each quarter is based upon the amount of reported sales. The proposed rule treated all OLMs as reportable sales in regards to GSAR clause 552.238-74. The commenter stated reporting OLMs is an information collection burden that should be borne by the Government. The commenter also submitted three questions: Is the IFF applicable to OLMs reported under the OLM SIN? How will GSA use lump sum sales reported through the 72A Reporting System to evaluate appropriate OLM usage? Do transactional data reporting requirements apply for OLMs under contracts that include Alternate I of clause 552.238.74? Response: Task or delivery orders line items that include OLMs are subject to the reporting and IFF remittance requirements of GSAR clause 552.238-74, with the exception of travel costs. The information collection burden for both versions of that clause is already addressed by existing information collections that are approved by the Office of Management and Budget's Office of Information and Regulatory Affairs, in accordance with the Paperwork Reduction Act; \13\ those estimates are updated every three years to account for changes in the program over time. --------------------------------------------------------------------------- \13\ Public Law 104-13, 109 Stat. 163. --------------------------------------------------------------------------- As to the questions regarding OLM and sales reporting, GSA offers the following responses: The IFF is applied to OLMs reported under the OLM SINs, except for travel. Including OLMs (other than travel) in these information collections provides GSA a control mechanism to ensure that the Federal Supply Schedules continue to ensure the lowest overall cost alternative. OLMs (other than travel) are subject to the transactional data reporting requirements of GSAR clause 552.238-74 Alternate I. 5. Parity With Other Government Contract Vehicles Comment: One commenter stated the proposed rule fails to meet its objective of establishing parity with other Government contract vehicles.\14\ --------------------------------------------------------------------------- \14\ See CGP and ITAPS Letter. --------------------------------------------------------------------------- The proposed rule noted, ``Currently, [IDIQ] contracts provide the flexibility to easily acquire order-level materials; however the FSS program does not. This proposed rule aims to create parity between the FSS program and other commercial IDIQs . . .'' \15\ However, the commenter stated the proposed rule failed to provide parity with other programs because other programs do not have requirements to send three quotes or report OLMs, but do allow contractors to recover indirect costs. --------------------------------------------------------------------------- \15\ See GSAR Case 2016-G506; Docket 2016-0016; Sequence 1 [81 FR 62445 (Sep. 9, 2016)]. --------------------------------------------------------------------------- Response: As noted in the proposed rule and acknowledged by the commenter, other commercial-item IDIQ contracts allow for OLMs. Accordingly, this rule provides parity in that regard. However, this final rule requires OLMs (other than travel costs) to be reported in accordance with GSAR clause 552.238-74 to provide GSA insight into their use and to facilitate IFF collection. 6. Requirements of FAR Clause 52.212-4 Alternate I Comment: One commenter stated the FAR does not require the procedures proposed by this rule and the existing FAR clause 52.212-4 Alternate I provides a mechanism to obtain OLMs that ensures the integrity of the Schedules program.\16\ --------------------------------------------------------------------------- \16\ See CGP and ITAPS Letter. --------------------------------------------------------------------------- Response: Several changes have been made to the GSAR text as a result of comments received in response to the proposed rule. The intent of these changes, and the rule in general, is to align OLM ordering procedures with existing authorities, including the FAR, to the maximum extent possible. However, GSA received feedback from its customer agencies that special OLM ordering procedures would be needed in [[Page 3278]] order to ensure appropriate use of the authorized Schedules that allow for OLMs. In addition to special ordering procedures, customer agency feedback contributed to the 33.33 percent threshold for OLMs. GSA received feedback from customer agencies that a threshold over 50 percent would be too high since over half of the order would be comprised of order-level materials and not be consistent with the intent of the OLM authority. OLMs are to be placed in direct support of a task or delivery order (and not the primary purpose), therefore the \1/3\ threshold struck a balance by encouraging the use of OLMs while enforcing a control mechanism at the same time. 7. Indirect Costs Comment: One commenter stated the GSAR rule should not preclude agencies from allowing indirect costs. Proposed GSAR 538.7103(a)(3) stated, ``Insert `none' in FAR clause 52.212-4(i)(1)(ii)(D)(2).'' The commenter indicated there are costs associated with contractors procuring OLMs separate from the fully burdened labor rate awarded on the Schedule contract, and the proposed rule does not provide a mechanism for recovering those costs. Response: The GSAR text at 552.238-82(d)(7) has been revised to be consistent with the current FAR fill-in found at 52.212-4 Alternate 1 (i)(1)(ii)(D)(2) to allow the flexibility for vendors to recover indirect costs. 8. Existing Ancillary Products/Services SINs on Schedules Comment: One commenter inquired about the impact the proposed rule would have on SINs under existing Schedules for ancillary products/ services and other direct costs (ODCs).\17\ --------------------------------------------------------------------------- \17\ Ibid. --------------------------------------------------------------------------- Response: GSA is implementing non-regulatory guidance for its FSS acquisition workforce in conjunction with this regulatory final rule, which will be viewable to the public in the General Services Administration Acquisition Manual (GSAM) posted on Acquisition.gov.\18\ The new non-regulatory GSAM guidance states items awarded under ancillary supplies or ODC SINs are not considered order-level materials. --------------------------------------------------------------------------- \18\ https://www.acquisition.gov/?q=gsam_looseleaf. --------------------------------------------------------------------------- 9. Special Ordering Procedures--Order Preference Comment: One commenter asked whether the OLM clause's requirement to follow the procedures at FAR 8.404(h) is intended to require ordering agencies to specify to Schedule contractors the type of request for quotations they must use in obtaining quotations for OLMs.\19\ --------------------------------------------------------------------------- \19\ See CGP and ITAPS Letter. --------------------------------------------------------------------------- Response: The intent of the special ordering procedures at 552.238- 82(d)(6) clause is to provide guidance on the type of order preference for services and direction to the ordering activity on issuing time- and-materials or labor hour orders including OLMs. 10. Special Ordering Procedures--OLM SIN Comment: One commenter inquired about the process for obtaining an OLM Special Item Number (SIN). Response: The OLM SIN will be added to all existing contracts for Schedules authorized to allow for OLMs by a Government-initiated bilateral modification. New contracts under any Schedule authorized to allow for OLMs will include the OLM SIN once the Schedule solicitation is updated. However, the OLM SIN cannot be the only awarded SIN on a FSS contract or a FSS BPA. 11. Special Ordering Procedures--Ceiling Price Comment: One commenter recommended GSA delete the proposed procedures at GSAR 552.238-82(d)(9), which required ordering activities to follow the procedures at FAR 8.405-6(d) in the event the ordering activity increases the ceiling price of an OLM above the micro-purchase threshold. The commenter indicated these procedures are a burdensome requirement that conflicts with the contracting officer's independent judgment to determine what constitutes a cardinal change.\20\ --------------------------------------------------------------------------- \20\ See Jalad Letter. --------------------------------------------------------------------------- Response: The procedures in GSAR clause 552.238-82 have been revised to be consistent with the requirements at FAR 8.404(h)(3)(iv). The clause reiterates the procedures required when increasing the ceiling price for OLMs. 12. Open Market Items Comment: One commenter requested GSA define open market items in the GSAR rule.\21\ --------------------------------------------------------------------------- \21\ See CGP and ITAPS Letter. --------------------------------------------------------------------------- Response: Open market items are procured in accordance with FAR 8.402(f) and are purchased outside the authority of the Schedules program using open market procedures (e.g., FAR Parts 13, 14, and 15). The difference in authority is addressed in the OLM definition and the special ordering procedures of the final rule. Accordingly, GSA chose not to define open market items in the new GSAR provisions and GSAR clause. 13. Schedule Pricelists for OLMs Comment: One commenter asked whether contractors will be required to build a fixed burden into their Schedule pricelists for OLMS.\22\ --------------------------------------------------------------------------- \22\ See Jones Letter. --------------------------------------------------------------------------- Response: The nature of the specific OLMs will not be known at the time of the FSS contract or FSS BPA award. Consequently, any potential indirect costs could not be specified in advance and included on the Schedule pricelist. However, the final rule allows indirect costs in accordance with the procedures at GSAR 538.7204, which is in alignment with FAR clause 52.212-4 Alternate I. III. Expected Cost Savings of This Final Rule Data was gathered from GSA's Federal Acquisition Service (FAS) to estimate total annualized cost savings that will be achieved from the number of Schedule contracts that will authorize OLM. A 7 percent discount rate was used for all calculations. GSA reviewed active FY 2018 contracts for contractors that hold Schedule and non-Schedule contracts to understand the duplicate contract landscape. The total baseline population is 16,450 contracts that include Schedule and non-Schedule contracts. Of the total contract population, 14,674 were Schedule contracts and 1,776 were non-Schedule contracts. Small businesses were about 80 percent of this population with large businesses representing the remaining 20 percent of the total population. The data illustrated that 11 percent of the total contract population hold Schedule and non-Schedule contracts. Of the 11 percent, about 59 percent of those contracts are duplicates. From the 59 percent of duplicate contracts, it is estimated there will be a 50 percent contract reduction, thus resulting in contract proposal and contract administrations savings for industry. It is understood, that one contractor may hold more than one duplicate contract among their Schedule and non-Schedule contracts. The estimated 50 percent reduction in duplicate contracts represents 421 small business contracts and 105 large business contracts. Government Cost Savings Allowing OLMs on authorized Schedules will help reduce contract duplication and associated administrative costs. By reducing the [[Page 3279]] amount of duplicate and ancillary contracts, cost savings will be achieved by a reduction in source selection procedures and contract administration. It was estimated that two source selection participants require an average of 24 hours to execute the source selection process per contract. Contract administration savings was calculated by estimating four hours per contract per year. By combining the savings achieved from the reduction of source selection procedures and contract administration, the estimated annualized cost savings for the Government is $109,434. Public Cost Savings The addition of the OLMs on authorized Schedules will result in proposal preparation and contract administration savings for both small and large businesses. It was estimated that a senior and a journeyman level representative require 24 hours to prepare a proposal to acquire a new contract. Contract administration savings was calculated by estimating four hours per contract per year. By combining the savings achieved from the reduction of proposal preparation for new contracts and contract administration, the estimated annualized cost savings for the public is $164,559. The OLM authority adds GSAR clause 552.238-82, Special Ordering Procedures, which includes a requirement for the contractor proposing OLMs as part of a solution to obtain three quotes for each order above the simplified acquisition threshold to support the price reasonableness of the OLMs consistent with existing standard procedures at FAR 8.405-1(d). One of these quotes may be furnished by the contractor, and if the contractor has an approved purchasing system per FAR 44.3, they are exempt from the three quote requirement. It was estimated that 10 percent of the total Schedule population (1,467 contracts) would require one hour to document their records that three quotes were obtained to support price reasonableness. The estimated annualized cost for the public is $35,076. The total net savings for the public is $121,012. The total annualized cost savings is estimated at $230,446. IV. Executive Order 12866 and 13563 Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. V. Executive Order 13771 This final rule is considered an E.O. 13771 deregulatory action. Details on the estimated cost savings of this proposed rule can be found in the rule's economic analysis. Expected annualized cost savings are $230,446 (7 percent discount rate, in perpetuity). VI. Executive Order 13777 This final rule was identified by GSA's Regulatory Reform Task Force as a rule that improves efficiency by eliminating procedures with costs that exceed the benefits as described in section IV. VII. Regulatory Flexibility Act This final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule merely clarifies the authority to acquire OLMs when placing a task or delivery order against an authorized FSS contract or FSS BPA. The rule imposes no new reporting, recordkeeping, or other information collection requirements. Although this rule does not have a significant impact on a substantial number of small entities, GSA nonetheless opted to prepare an Initial Regulatory Flexibility Analysis (IRFA) in conjunction with the proposed rule. As a result, GSA has also prepared a Final Regulatory Flexibility Analysis (FRFA), consistent with 5 U.S.C. 603, which is summarized as follows: GSA does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. GSA has prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows: The rule clarifies the authority to acquire order-level materials when placing a task order or delivery order against an authorized FSS contract or FSS BPA. Task or delivery order line times that include OLMs are subject to the reporting and IFF remittance requirements of GSAR clause 552.238-74, with the exception of travel costs. The reporting and IFF remittance requirements of GSAR clause 552.238-74 is an existing requirement to those contractors that currently hold a GSA Schedule contract. There are over 15,000 (approximately 80 percent) small businesses that have GSA Schedule contracts, which already adhere to the required reporting and IFF remittance requirements of GSAR clause 552.238-74. The OLM authority will expand business opportunities for those small businesses that do not hold GSA Schedule contracts. Entities that do not hold GSA Schedule contracts, and are awarded task or delivery orders that include OLMs, are required to adhere to the reporting requirement at GSAR clause 552.238-74. There were no comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule. Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. VIII. Paperwork Reduction Act The final rule does not contain any new information collection requirements that require the approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. chapter 35). Order-level materials, excluding travel, are subject to the reporting requirements of GSAR clause 552.238-74 Industrial Funding Fee and Sales Reporting, which is already approved through the information collection tracked under OMB Control Number 3090-0121. List of Subjects in 48 CFR Parts 515, 538, and 552 Government procurement. Dated: January 19, 2018. Jeffrey A. Koses, Senior Procurement Executive, General Services Administration. Therefore, GSA amends 48 CFR parts 515, 538, and 552 as set forth below: 0 1. The authority citation for 48 CFR parts 515, 538, and 552 continues to read as follows: Authority: 40 U.S.C. 121(c). PART 515--CONTRACTING BY NEGOTIATION 0 2. Amend section 515.408 by adding a sentence to the end of the introductory text of paragraph (c) to read as follows: [[Page 3280]] 515.408 Solicitation provisions and contract clauses * * * * * (c) * * * Offerors are not required to complete the commercial sales practices disclosure for order-level materials (See subpart 538.72). * * * * * PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING 0 3. Add subpart 538.72 to read as follows: Subpart 538.72--Order-Level Materials Sec. 538.7200 Definitions. 538.7201 Applicability. 538.7202 [Reserved] 538.7204 Contract clauses. Subpart 538.72--Order-Level Materials 538.7200 Definitions. As used in this subpart: Order-level materials means supplies and/or services acquired in direct support of an individual task or delivery order placed against an authorized (see GSAR 538.7201(b) Federal Supply Schedule (FSS) contract or FSS Blanket Purchase Agreement (BPA)), when the supplies and/or services are not known at the time of Schedule contract or FSS BPA award. The prices of order-level materials are not established in the FSS contract or FSS BPA. However, order-level materials are purchased under the authority of the FSS program, pursuant to 41 U.S.C. 152(3), and are not open market items, which are discussed in FAR 8.402(f). 538.7201 Applicability. (a) The GSA Senior Procurement Executive authorizes the use of order-level materials on Federal Supply Schedules. (b) The list of Federal Supply Schedules authorized to allow for order-level materials is available at https://www.gsa.gov/olm. 538.7202 [Reserved] 538.7204 Contract clauses. (a) Use FAR clause 52.212-4 Alternate I in all Federal Supply Schedules authorized for the acquisition of order-level materials (see 538.7201(b)). Use the following language for the clause fill-in: (1) Insert ``Each order must list separately subcontracts for services excluded from the FSS Hourly Rates'' in paragraph (e)(1)(iii)(D). (2) Insert ``Each order must list separately the elements of other direct costs for that order'' in paragraph (i)(1)(ii)(D)(1). (3) Insert ``Each order must list separately the fixed amount for the indirect costs and payment schedule; if no indirect costs are approved, insert `None' '' in (i)(1)(ii)(D)(2). (b) Use 552.238-82, Special Ordering Procedures for the Acquisition of Order-Level Materials, in all Federal Supply Schedules authorized for the acquisition of order-level materials (see 538.7201). PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 0 4. Add section 552.238-82 to read as follows: 552.238-82 Special Ordering Procedures for the Acquisition of Order- Level Materials As prescribed in 538.7204(b), insert the following clause: Special Ordering Procedures for the Acquisition of Order-Level Materials (JAN 2018) (a) Definitions. Order-level materials means supplies and/or services acquired in direct support of an individual task or delivery order placed against a Federal Supply Schedule (FSS) contract or FSS blanket purchase agreement (BPA), when the supplies and/or services are not known at the time of Schedule contract or FSS BPA award. The prices of order-level materials are not established in the FSS contract or FSS BPA. Order-level materials acquired following the procedures in paragraph (d) are done so under the authority of the FSS program, pursuant to 41 U.S.C. 152(3), and are not open market items, which are discussed in FAR 8.402(f). (b) FAR 8.403(b) provides that GSA may establish special ordering procedures for a particular FSS. (c) The procedures in FAR subpart 8.4 apply to this contract, with the exceptions listed in this clause. If a requirement in this clause is inconsistent with FAR subpart 8.4, this clause takes precedence pursuant to FAR 8.403(b). (d) Procedures for including order-level materials when placing an individual task or delivery order against an FSS contract or FSS BPA. (1) The procedures discussed in FAR 8.402(f) do not apply when placing task and delivery orders that include order-level materials. (2) Order-level materials are included in the definition of the term ``materials'' in [FAR] clause 52.212-4 Alternate I, and therefore all provisions of FAR clause 52.212-4 Alternate I that apply to ``materials'' also apply to order-level materials. (3) Order-level materials shall only be acquired in direct support of an individual task or delivery order and not as the primary basis or purpose of the order. (4) The cumulative value of order-level materials in an individual task or delivery order awarded under a FSS contract or FSS BPA shall not exceed 33.33 percent of the total value of the individual task or delivery order. (5) All order-level materials shall be placed under the Order- Level Materials SIN. (6) Prior to the placement of an order that includes order-level materials, the Ordering Activity shall follow procedures in FAR 8.404(h). (7) To support the price reasonableness of order-level materials, (i) The contractor proposing order-level materials as part of a solution shall obtain a minimum of three quotes for each order-level material above the simplified acquisition threshold. (A) One of these three quotes may include materials furnished by the contractor under FAR 52.212-4 Alt I (i)(1)(ii)(A). (B) If the contractor cannot obtain three quotes, the contractor shall maintain its documentation of why three quotes could not be obtained to support their determination. (C) A contractor with an approved purchasing system per FAR 44.3 shall instead follow its purchasing system requirement and is exempt from the requirements in 552.238-82(d)(7)(i)(A)-(B). (ii) The Ordering Activity Contracting Officer must make a determination that prices for all order-level materials are fair and reasonable. The Ordering Activity Contracting Officer may base this determination on a comparison of the quotes received in response to the task or delivery order solicitation or other relevant pricing information available. (iii) If indirect costs are approved per [FAR 52.212- 4(i)(1)(ii)(D)(2) Alternate I), the Ordering Activity Contracting Officer must make a determination that all indirect costs approved for payment are fair and reasonable. Supporting data shall be submitted in a form acceptable to the Ordering Activity Contracting Officer. (8) Prior to an increase in the ceiling price of order-level materials, the Ordering Activity Contracting Officer shall follow the procedures at FAR 8.404(h)(3)(iv). (9) In accordance with GSAR clause 552.215-71 Examination of Records by GSA, GSA has the authority to examine the Contractor's records for compliance with the pricing provisions in FAR clause 52.212-4 Alternate I, to include examination of any books, documents, papers, and records involving transactions related to the contract for overbillings, billing errors, and compliance with the IFF and the Sales Reporting clauses of the contract. (10) OLMs are exempt from the following clauses: (i) 552.216-70 Economic Price Adjustment--FSS Multiple Award Schedule Contracts. (ii) 552.238-71 Submission and Distribution of Authorized FSS Schedule Pricelists. (iii) 552.238-75 Price Reductions. (11) Exceptions for travel. (i) Travel costs are governed by FAR 31.205-46 and therefore the requirements in paragraph (d)(7) do not apply to travel costs. (ii) Travel costs do not count towards the 33.33% limitation described in paragraph (d)(4). [[Page 3281]] (iii) Travel costs are exempt from clause 552.238-74 Industrial Funding Fee and Sales Reporting. (End of Clause) [FR Doc. 2018-01232 Filed 1-23-18; 8:45 am] BILLING CODE 6820-61-P
![Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations 3275
collection that will be modified by these activities and Schedule contractors. II. Discussion of the Proposed Rule
rules, OMB review is not necessary. Ordering activities enjoy simplified The proposed rule published in the
Thus, these rules may become effective ordering procedures and reduced prices, Federal Register at 81 FR 62445 on
immediately. while Schedule contractors connect September 9, 2016 and addressed the
Federal Communications Commission. with federal business quickly and importance of providing the same
Marlene H. Dortch,
easily. Additional features of the flexibility for the FSS program that is
Schedules program, including Blanket currently authorized for other indefinite
Secretary.
Purchase Agreements (BPAs) and delivery, indefinite quantity (IDIQ)
[FR Doc. 2018–01213 Filed 1–23–18; 8:45 am]
Contractor Team Arrangements (CTAs), vehicles, which will help reduce
BILLING CODE 6712–01–P greatly enhance the flexibility of the contract duplication and the associated
program. administrative costs and inefficiencies.
These features offer: GSA also discussed how the proposed
GENERAL SERVICES • Additional price discounts for
changes would also reduce transaction
ADMINISTRATION ordering activities;
• Expanded opportunities for costs by eliminating the need for
48 CFR Parts 515, 538, and 552 contractors; additional contracts for ancillary work.
• Elimination of redundant effort, The rule aimed at achieving parity
[GSAR Case 2016–G506; Docket No. 2016– between the FSS programs and other
0016; Sequence No. 1] with a single contracting vehicle
fulfilling complex or ongoing needs; IDIQs, in terms of acquiring OLMs.
RIN 3090–AJ75 • Reductions in administrative time The rule presented two price
and paperwork; protections found in all IDIQ contracts
General Services Administration • Expanded business opportunities which authorized OLMs plus three
Acquisition Regulation (GSAR); for socioeconomic groups; and additional price protections not
Federal Supply Schedule, Order-Level • Help for ordering activities wishing generally found in such contracts.
Materials to reach socioeconomic goals. All IDIQ contracts authorizing OLMs
The Schedules Program supports include two key government
AGENCY: Office of Acquisition Policy,
Federal Agencies’ missions by providing protections:
General Services Administration. 1. The contracting officer must
access from simple commodities such as
ACTION: Final rule. determine the prices are fair and
pens and pencils to complex services
such as IT Modernization. reasonable.
SUMMARY: The General Services 2. FAR Clause 52.212–4 Alternate 1
Administration (GSA) is amending the Authority for This Rulemaking paragraph (i)(1)(ii) which addresses:
General Services Administration
Acquisition Regulation (GSAR) to 41 U.S.C. 152(3)(B) deemed FSS a. Paying for commercial items at prices
clarify the authority to acquire order- procedures to meet the Competition in not to exceed established catalog or
level materials (OLMs) when placing an Contracting Act (CICA) requirement of market price
individual task or delivery order against full and open competition as long as b. Conditions for reimbursing
a Federal Supply Schedule (FSS) participation has been open to all contractors for actual cost
responsible sources; and orders and c. Procedures for handling indirect cost
contract or FSS blanket purchase
contracts under those procedures result reimbursement
agreement (BPA). OLMs are supplies
and/or services acquired in direct in the lowest overall cost alternative to The three unique protections GSA
support of an individual task or delivery meet the needs of the Federal included in the proposed rule were:
order placed against an FSS contract or Government. 1. The requirement to submit three
BPA, when the supplies and/or services GSA has long recognized the lowest quotes;
are not known at the time of contract or overall cost alternative does not just 2. Limitation of percentage of order
BPA award. include the actual price paid to the which can be OLM; and
contractor, but also the administrative 3. Establishment of an OLM SIN,
DATES: Effective: January 24, 2018. cost of conducting the acquisition. For which requires reporting of OLM.
FOR FURTHER INFORMATION CONTACT: Ms. example, GSA charges a low Commenters noted that due to these
Leah Price, GSA Acquisition Policy transactional fee for orders to be placed three unique GSA protections, the
Division, Senior Policy Advisor, at against a Schedule and the efficiency of proposed rule did not fully meet the
leah.price@gsa.gov. For information the simplified acquisition process parity objective. In the final rule, GSA
pertaining to status or publication translates to time and cost savings. The maintained these three unique
schedules, contact the Regulatory administrative cost to acquire similar protections while simplifying and
Secretariat at 202–501–4755. Please cite goods or services combined with narrowing the three quote requirement.
GSAR Case 2016–G506. possible fees on a new contract This is more fully discussed in the
SUPPLEMENTARY INFORMATION: duplicates efforts resulting in a less Analysis of Public Comments section.
efficient way to acquire those goods or GSA agrees that this leaves the final rule
I. Background close to, but not at full parity. However,
services.
GSA’s Federal Supply Schedule (FSS) This is also consistent with the the requirements are currently the best
program, commonly known as the GSA Federal Acquisition System and its available means to ensure price
Schedules program or Multiple Award principle to minimize administrative reasonableness and provide confidence
Schedule (MAS) program is the operating costs (FAR 1.102(b)(2)). The to customers when using the new OLM
Government’s most used commercial- Federal Acquisition System is designed
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authority on Federal Supply Schedules.
item purchasing channel, accounting for to deliver the best value product or This is more fully discussed in the
approximately $33 billion of Federal service to the customer in terms of cost, Analysis of Public Comments section.
contract awards in fiscal year 2016 (not quality, and timeliness. By lowering the These price protections, when
including the VA Schedules). cost to conduct the acquisition, and combined with the current design of the
GSA Schedules provide a convenient simplifying the acquisition process, FSS program, are sufficient to ensure
and effective option for both ordering administrative savings can be achieved. the Federal Supply Schedules continue
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to offer the lowest overall cost requirement, and GSAR clause 552.238– for all OLMs are fair and reasonable and
alternative. Other key features of the 74 Industrial Funding Fee and Sales may make this determination based on
FSS program include ordering Reporting. relevant pricing available, including the
procedures designed to promote • Clarifies the ordering activity direct competition of offers received in
competition, and, at certain dollar levels contracting officer is required to follow response to their solicitation. Lastly, the
to increase competition, an existing the procedures found at FAR addition of the OLM authority to the
deviation to FAR 51 (which authorizes 8.404(h)(3)(iv) prior to an increase in the authorized Schedules provides an
GSA contractors, performing on a time- ceiling price of OLMs. added flexibility through which
and-material or labor-hour basis, to B. Analysis of Public Comments industry can provide complete
purchase ancillary supplies and services procurement solutions through the FSS
from Schedule contractors or process GSA received four comment letters in program, reducing the need for
requisitions through the GSA Global response to the proposed rule.1 All contractors to prepare solutions for
Supply Program) the Acquisition comments filed were considered, many separate contracts. The reduction results
Gateway, (a logical home for a future of which led to the changes described in in managing fewer open market
GSA effort to publicize OLM best the previous section.2 Public comments contracts and decreasing proposal costs.
practices), and ongoing category are grouped into categories in order to
provide clarification and to better 2. OLM Threshold of 33 Percent
management work to improve the
acquisition of services and IT, all work respond to the issues raised. Comment: Two commenters
together, with this final rule, to ensure 1. Three Quote Requirement recommended GSA remove the
Federal Supply Schedules remain open requirement that OLMs be limited to 33
Comment: Two commenters percent of the order per the special
to all and are the lowest overall cost recommended GSA eliminate the
alternative. ordering procedures at GSAR 552.238–
proposed requirement for contractors to 82(d)(4).6 One commenter stated the 33
A. Summary of Significant Changes submit three quotes to the ordering percent threshold was arbitrary and may
Four respondents submitted activity contracting officer to determine be difficult to maintain over time,
comments on the proposed rule. The price reasonableness.3 One commenter noting that other direct cost (ODC)
General Services Administration has stated the requirement would be Special Item Numbers (SINs) currently
reviewed the comments in the burdensome and unnecessary; that used in the Schedules program have no
development of the final rule. A commenter also asked if the lowest such limits.7 The second commenter
priced quote would be the basis for the also stated the threshold was arbitrary
discussion of the comments and the
price evaluation.4 The other commenter and will invoke unnecessary
changes made to the rule as a result of
asked if the same three quotes could be consequences, citing examples where
those comments are provided as
used for multiple orders.5 travel costs may exceed the OLM
follows: Response: GSA partially agreed with
This final rule makes the following threshold.8
two of the commenter’s recommended Response: GSA agrees that travel
significant changes from the proposed
alternatives and revised and narrowed should not be included in the limitation
rule:
Eligible Schedules: GSAR 538.7201 the three quote requirement for each and made this change in the final rule.
has been revised to reference a website OLM. First, the special ordering
However, GSA does not agree that the
procedures at GSAR 552.238–82(d)(7)(i)
that lists the Federal Supply Schedules 33 percent cap on OLMs is arbitrary,
has been revised to instruct contractors
authorized to include OLMs. although to make it easier to understand
Indirect Costs: The instructions to to obtain three quotes for each OLM
and remember, it is revising the
contracting officers in GSAR 538.7204 above the simplified acquisition
threshold to 33.33 percent or 1⁄3 of the
subparagraph (a)(3) have been revised to threshold. The three quotes are not
order. 41 U.S.C. 152(3)(B) deemed FSS
allow for indirect costs, consistent with submitted with the offer, but should be
procedures to meet the Competition in
the procedures in FAR clause 52.212–4 maintained in the contractor’s file and
Contracting Act (CICA) requirement of
Alternate I(i)(1)(ii)(D)(2). are still subject to audit. The threshold
full and open competition as long as
Clause Text: GSAR clause 552.238– has been increased from the micro-
purchase threshold to the simplified participation has been open to all
82, Special Ordering Procedures for the responsible sources; and orders and
Acquisition of Order-Level Materials, acquisition threshold to be consistent
with ordering procedures at FAR contracts under those procedures result
has been revised as follows: in the lowest overall cost alternative.
• Vendors must obtain three quotes Subpart 8.4. Second, paragraph (d)(7)(i)
has been revised to exempt contractors This statutory language is not found in
for each order-level material above the other IDIQ contracts.
simplified acquisition threshold, for the that have an approved purchasing
GSA determined that to meet the
ordering activity contracting officer to system determined by a Contractor
statutory requirement, additional levels
determine OLM prices fair and Purchasing System Review (CPSR) per
of protection were required, one of
reasonable. Contractors with an FAR 44.3 from the three quote
which was a cap on order level
approved purchasing system per FAR requirement. The contractor shall follow
materials.
44.3 are exempt from the three quote its purchasing system requirement Having determined there must be a
requirement. instead of the three quote requirement cap, GSA’s next consideration is around
• Provides procedures for the identified in paragraphs (d)(7)(i)(A)–(C). the appropriate level. In large scale
ordering activity contracting officer to The ordering activity contracting officer Engineering Services and IT buys, GSA
make a determination that all indirect will make the determination that prices is aware of customer agencies adding
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costs associated with OLMs are fair and additional controls once materials top
1 See GSAR Case 2016–G506; Docket 2016–0016;
reasonable. 10 percent. On the other hand, in
Sequence 1 [81 FR 62445 (Sep. 9, 2016)].
• Clarifies travel costs are governed 2 See Section II.A, Summary of Changes Made at advertising services, media time, a
by FAR 31.205–46 and exempts travel the Final Rule Stage.
OLMs from certain requirements, 3 See e.g., CGP and ITAPS Letter and DM Letter. 6 See e.g., CGP and ITAPS Letter and Jalad Letter.
including the 1⁄3 of the order threshold, 4 See CGP and ITAPS Letter. 7 See CGP and ITAPS Letter.
price reasonableness determination 5 See DM Letter. 8 See Jalad Letter.
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![Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations 3277
single OLM, can easily exceed 25 an order includes both travel and non- • The IFF is applied to OLMs
percent of the cost of an order. To travel OLMs, the non-travel OLMs in the reported under the OLM SINs, except
provide a reverse example, as a result of order must comply with all OLM for travel.
industry feedback associated with the requirements in GSAR clause 552.238– • Including OLMs (other than travel)
Maximum Order Threshold in 82. in these information collections
installation services for systems provides GSA a control mechanism to
furniture, GSA learned that installation 4. Applicability of GSAR Clause
ensure that the Federal Supply
services often top 25 percent of the cost 552.238–74 Industrial Funding Fee and
Schedules continue to ensure the lowest
of the furniture. Sales Reporting
overall cost alternative.
Thus, GSA concluded: (1) There has Comment: One party provided • OLMs (other than travel) are subject
to be a cap, (2) the cap should be above comments relating to the applicability of to the transactional data reporting
25 percent, and (3) the cap has to be GSAR clause 552.238–74 Industrial requirements of GSAR clause 552.238–
below 50 percent, to ensure the Funding Fee and Sales Reporting on 74 Alternate I.
principle purpose of the order was to OLMs.12
acquire a service or product off of the The basic version of the clause 5. Parity With Other Government
Federal Supply Schedule. While any requires contractors to report Schedule Contract Vehicles
number between 26 percent and 49 sales within 30 days after the end of Comment: One commenter stated the
percent would fit, GSA also concluded each quarter. Alternate I of the clause proposed rule fails to meet its objective
that to be consistent the Federal Supply requires contractors to report of establishing parity with other
Schedules program, the cap has to be transactional data within 30 days after Government contract vehicles.14
clear, has to be easy to explain to the end of each month. Both versions of The proposed rule noted, ‘‘Currently,
customer agencies, has to be easy for the clause require contractors to remit [IDIQ] contracts provide the flexibility
contractors to understand and follow, IFF payments within 30 days after the to easily acquire order-level materials;
has to be easy for GSA to conduct end of each quarter. The IFF, currently however the FSS program does not. This
needed training, and has to be easy for set at 0.75 percent, is charged to proposed rule aims to create parity
everyone to remember. There is only ordering activities for the use of the between the FSS program and other
one number between 1⁄4 and 1⁄2 which Schedules program but is remitted by commercial IDIQs . . .’’ 15 However, the
meets all these criteria: 1⁄3. Thus, GSA the contractor; the amount of IFF due commenter stated the proposed rule
set the OLM cap at 1⁄3, or 33.33 percent. each quarter is based upon the amount failed to provide parity with other
of reported sales. The proposed rule programs because other programs do not
3. Travel Costs
treated all OLMs as reportable sales in have requirements to send three quotes
Comment: Two parties submitted regards to GSAR clause 552.238–74. or report OLMs, but do allow
comments relating to the application of The commenter stated reporting contractors to recover indirect costs.
certain OLM requirements and OLMs is an information collection Response: As noted in the proposed
procedures to travel costs.9 One burden that should be borne by the rule and acknowledged by the
commenter asked if the OLM ordering Government. The commenter also commenter, other commercial-item IDIQ
procedures would contain the same submitted three questions: contracts allow for OLMs. Accordingly,
flexibility as Schedule clause C–FSS– • Is the IFF applicable to OLMs this rule provides parity in that regard.
370 Contractor Tasks/Special reported under the OLM SIN? However, this final rule requires OLMs
Requirements.10 The other commenter • How will GSA use lump sum sales (other than travel costs) to be reported
stated applying the proposed OLM reported through the 72A Reporting in accordance with GSAR clause
procedures to travel costs would be System to evaluate appropriate OLM 552.238–74 to provide GSA insight into
burdensome on ordering agencies.11 usage? their use and to facilitate IFF collection.
Response: The special ordering • Do transactional data reporting
procedures at GSAR clause 552.238–82 requirements apply for OLMs under 6. Requirements of FAR Clause 52.212–
have been revised to allow the same contracts that include Alternate I of 4 Alternate I
flexibility as Schedules clause C–FSS– clause 552.238.74? Comment: One commenter stated the
370 Contractor Tasks/Special Response: Task or delivery orders line FAR does not require the procedures
Requirements. For the authorized items that include OLMs are subject to proposed by this rule and the existing
Schedules allowing for OLMs, the GSAR the reporting and IFF remittance FAR clause 52.212–4 Alternate I
clause 552.238–82 Special Ordering requirements of GSAR clause 552.238– provides a mechanism to obtain OLMs
Procedures for the Acquisition of Order- 74, with the exception of travel costs. that ensures the integrity of the
Level Materials will replace the travel The information collection burden for Schedules program.16
portion (b) of the Schedules clause both versions of that clause is already Response: Several changes have been
C–FSS–370 Contractor Tasks/Special addressed by existing information made to the GSAR text as a result of
Requirements. Specifically, the final collections that are approved by the comments received in response to the
rule clarifies travel OLMs will continue Office of Management and Budget’s proposed rule. The intent of these
to be handled in accordance with FAR Office of Information and Regulatory changes, and the rule in general, is to
Part 31.205–46 and exempts travel Affairs, in accordance with the align OLM ordering procedures with
OLMs from the requirements in clause Paperwork Reduction Act; 13 those existing authorities, including the FAR,
552.238–74 Industrial Funding Fee and estimates are updated every three years to the maximum extent possible.
Sales Reporting, the 33.33 percent to account for changes in the program However, GSA received feedback from
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threshold, and the price reasonableness over time. its customer agencies that special OLM
determination in subparagraph (d)(7) of As to the questions regarding OLM ordering procedures would be needed in
GSAR clause 552.238–82. However, if and sales reporting, GSA offers the
following responses: 14 See CGP and ITAPS Letter.
9 See e.g., CGP and ITAPS Letter and Jalad Letter. 15 See GSAR Case 2016–G506; Docket 2016–0016;
10 See CGP and ITAPS Letter. 12 See CGP Letter. Sequence 1 [81 FR 62445 (Sep. 9, 2016)].
11 See Jalad Letter. 13 Public Law 104–13, 109 Stat. 163. 16 See CGP and ITAPS Letter.
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![3280 Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations
515.408 Solicitation provisions and (3) Insert ‘‘Each order must list total value of the individual task or delivery
contract clauses separately the fixed amount for the order.
* * * * * indirect costs and payment schedule; if (5) All order-level materials shall be placed
(c) * * * Offerors are not required to no indirect costs are approved, insert under the Order-Level Materials SIN.
complete the commercial sales practices (6) Prior to the placement of an order that
‘None’ ’’ in (i)(1)(ii)(D)(2). includes order-level materials, the Ordering
disclosure for order-level materials (See (b) Use 552.238–82, Special Ordering Activity shall follow procedures in FAR
subpart 538.72). Procedures for the Acquisition of Order- 8.404(h).
* * * * * Level Materials, in all Federal Supply (7) To support the price reasonableness of
Schedules authorized for the acquisition order-level materials,
PART 538—FEDERAL SUPPLY of order-level materials (see 538.7201). (i) The contractor proposing order-level
SCHEDULE CONTRACTING materials as part of a solution shall obtain a
PART 552—SOLICITATION minimum of three quotes for each order-level
■ 3. Add subpart 538.72 to read as PROVISIONS AND CONTRACT material above the simplified acquisition
follows: CLAUSES threshold.
(A) One of these three quotes may include
Subpart 538.72—Order-Level Materials ■ 4. Add section 552.238–82 to read as materials furnished by the contractor under
Sec. follows: FAR 52.212–4 Alt I (i)(1)(ii)(A).
538.7200 Definitions. (B) If the contractor cannot obtain three
538.7201 Applicability. 552.238–82 Special Ordering Procedures quotes, the contractor shall maintain its
538.7202 [Reserved] for the Acquisition of Order-Level Materials documentation of why three quotes could not
538.7204 Contract clauses. As prescribed in 538.7204(b), insert be obtained to support their determination.
the following clause: (C) A contractor with an approved
Subpart 538.72—Order-Level Materials purchasing system per FAR 44.3 shall instead
Special Ordering Procedures for the follow its purchasing system requirement
538.7200 Definitions. Acquisition of Order-Level Materials and is exempt from the requirements in
As used in this subpart: (JAN 2018) 552.238–82(d)(7)(i)(A)–(B).
Order-level materials means supplies (ii) The Ordering Activity Contracting
and/or services acquired in direct (a) Definitions.
Officer must make a determination that
Order-level materials means supplies and/
support of an individual task or delivery or services acquired in direct support of an
prices for all order-level materials are fair
order placed against an authorized (see and reasonable. The Ordering Activity
individual task or delivery order placed
GSAR 538.7201(b) Federal Supply Contracting Officer may base this
against a Federal Supply Schedule (FSS)
Schedule (FSS) contract or FSS Blanket contract or FSS blanket purchase agreement determination on a comparison of the quotes
received in response to the task or delivery
Purchase Agreement (BPA)), when the (BPA), when the supplies and/or services are
not known at the time of Schedule contract order solicitation or other relevant pricing
supplies and/or services are not known information available.
at the time of Schedule contract or FSS or FSS BPA award. The prices of order-level
materials are not established in the FSS (iii) If indirect costs are approved per [FAR
BPA award. The prices of order-level 52.212–4(i)(1)(ii)(D)(2) Alternate I), the
contract or FSS BPA. Order-level materials
materials are not established in the FSS Ordering Activity Contracting Officer must
acquired following the procedures in
contract or FSS BPA. However, order- paragraph (d) are done so under the authority make a determination that all indirect costs
level materials are purchased under the of the FSS program, pursuant to 41 U.S.C. approved for payment are fair and
authority of the FSS program, pursuant 152(3), and are not open market items, which reasonable. Supporting data shall be
to 41 U.S.C. 152(3), and are not open are discussed in FAR 8.402(f). submitted in a form acceptable to the
market items, which are discussed in (b) FAR 8.403(b) provides that GSA may Ordering Activity Contracting Officer.
FAR 8.402(f). establish special ordering procedures for a (8) Prior to an increase in the ceiling price
particular FSS. of order-level materials, the Ordering
538.7201 Applicability. (c) The procedures in FAR subpart 8.4 Activity Contracting Officer shall follow the
(a) The GSA Senior Procurement apply to this contract, with the exceptions procedures at FAR 8.404(h)(3)(iv).
listed in this clause. If a requirement in this (9) In accordance with GSAR clause
Executive authorizes the use of order- 552.215–71 Examination of Records by GSA,
level materials on Federal Supply clause is inconsistent with FAR subpart 8.4,
this clause takes precedence pursuant to FAR GSA has the authority to examine the
Schedules. 8.403(b). Contractor’s records for compliance with the
(b) The list of Federal Supply (d) Procedures for including order-level pricing provisions in FAR clause 52.212–4
Schedules authorized to allow for order- materials when placing an individual task or Alternate I, to include examination of any
level materials is available at https:// delivery order against an FSS contract or FSS books, documents, papers, and records
www.gsa.gov/olm. BPA. involving transactions related to the contract
(1) The procedures discussed in FAR for overbillings, billing errors, and
538.7202 [Reserved] 8.402(f) do not apply when placing task and compliance with the IFF and the Sales
delivery orders that include order-level Reporting clauses of the contract.
538.7204 Contract clauses. (10) OLMs are exempt from the following
materials.
(a) Use FAR clause 52.212–4 Alternate (2) Order-level materials are included in clauses:
I in all Federal Supply Schedules the definition of the term ‘‘materials’’ in (i) 552.216–70 Economic Price
authorized for the acquisition of order- [FAR] clause 52.212–4 Alternate I, and Adjustment—FSS Multiple Award Schedule
level materials (see 538.7201(b)). Use therefore all provisions of FAR clause Contracts.
the following language for the clause 52.212–4 Alternate I that apply to (ii) 552.238–71 Submission and
fill-in: ‘‘materials’’ also apply to order-level Distribution of Authorized FSS Schedule
(1) Insert ‘‘Each order must list materials. Pricelists.
(3) Order-level materials shall only be (iii) 552.238–75 Price Reductions.
daltland on DSKBBV9HB2PROD with RULES
separately subcontracts for services
acquired in direct support of an individual (11) Exceptions for travel.
excluded from the FSS Hourly Rates’’ in task or delivery order and not as the primary (i) Travel costs are governed by FAR
paragraph (e)(1)(iii)(D). basis or purpose of the order. 31.205–46 and therefore the requirements in
(2) Insert ‘‘Each order must list (4) The cumulative value of order-level paragraph (d)(7) do not apply to travel costs.
separately the elements of other direct materials in an individual task or delivery (ii) Travel costs do not count towards the
costs for that order’’ in paragraph order awarded under a FSS contract or FSS 33.33% limitation described in paragraph
(i)(1)(ii)(D)(1). BPA shall not exceed 33.33 percent of the (d)(4).
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![Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Rules and Regulations 3281
(iii) Travel costs are exempt from clause In accordance with § 679.20(d)(1)(iii), DEPARTMENT OF COMMERCE
552.238–74 Industrial Funding Fee and Sales the Administrator, Alaska Region,
Reporting. National Oceanic and Atmospheric
NMFS (Regional Administrator), has
(End of Clause) determined that the A season Administration
[FR Doc. 2018–01232 Filed 1–23–18; 8:45 am] apportionment of the 2018 Pacific cod
BILLING CODE 6820–61–P TAC allocated as a directed fishing 50 CFR Part 679
allowance to catcher/processors using [Docket No. 161020985–7181–02]
pot gear in the BSAI will soon be
RIN 0648–XF925
DEPARTMENT OF COMMERCE reached. Consequently, NMFS is
prohibiting directed fishing for Pacific Fisheries of the Exclusive Economic
National Oceanic and Atmospheric cod by pot catcher/processors in the
Administration Zone Off Alaska; Pacific Cod by
BSAI. Catcher Vessels Greater Than or Equal
50 CFR Part 679 After the effective date of this closure to 60 Feet Length Overall Using Pot
the maximum retainable amounts at Gear in the Bering Sea and Aleutian
[Docket No. 161020985–7181–02] Islands Management Area
§ 679.20(e) and (f) apply at any time
RIN 0648–XF924 during a trip. AGENCY: National Marine Fisheries
Classification Service (NMFS), National Oceanic and
Fisheries of the Exclusive Economic
Atmospheric Administration (NOAA),
Zone Off Alaska; Pacific Cod by Pot
This action responds to the best Commerce.
Catcher/Processors in the Bering Sea
and Aleutian Islands Management Area available information recently obtained ACTION: Temporary rule; closure.
from the fishery. The Assistant
AGENCY: National Marine Fisheries Administrator for Fisheries, NOAA SUMMARY: NMFS is prohibiting directed
Service (NMFS), National Oceanic and (AA), finds good cause to waive the fishing for Pacific cod by catcher vessels
Atmospheric Administration (NOAA), greater than or equal to 60 feet (18.3
requirement to provide prior notice and
Commerce. meters (m)) length overall (LOA) using
opportunity for public comment
ACTION: Temporary rule; closure.
pot gear in the Bering Sea and Aleutian
pursuant to the authority set forth at 5 Islands management area (BSAI). This
SUMMARY: NMFS is prohibiting directed U.S.C. 553(b)(B) as such requirement is action is necessary to prevent exceeding
fishing for Pacific cod by catcher/ impracticable and contrary to the public the A season apportionment of the 2018
processors using pot gear in the Bering interest. This requirement is Pacific cod total allowable catch
Sea and Aleutian Islands management impracticable and contrary to the public allocated to catcher vessels greater than
area (BSAI). This action is necessary to interest as it would prevent NMFS from or equal to 60 feet (18.3m) LOA using
prevent exceeding the A season responding to the most recent fisheries pot gear in the BSAI.
apportionment of the 2018 Pacific cod data in a timely fashion and would DATES: Effective 1200 hours, Alaska
total allowable catch allocated to delay the closure of directed fishing for local time (A.l.t.), January 19, 2018,
catcher/processors using pot gear in the Pacific cod by pot catcher/processors in through 1200 hours, A.l.t., September 1,
BSAI. the BSAI. NMFS was unable to publish 2018.
DATES: Effective 1200 hours, Alaska a notice providing time for public FOR FURTHER INFORMATION CONTACT: Josh
local time (A.l.t.), January 20, 2018, comment because the most recent, Keaton, 907–586–7228.
through 1200 hours, A.l.t., September 1, relevant data only became available as SUPPLEMENTARY INFORMATION: NMFS
2018. of January 18, 2018. manages the groundfish fishery in the
FOR FURTHER INFORMATION CONTACT: Josh The AA also finds good cause to BSAI exclusive economic zone
Keaton, 907–586–7228. waive the 30-day delay in the effective according to the Fishery Management
SUPPLEMENTARY INFORMATION: NMFS date of this action under 5 U.S.C. Plan for Groundfish of the Bering Sea
manages the groundfish fishery in the 553(d)(3). This finding is based upon and Aleutian Islands Management Area
BSAI exclusive economic zone the reasons provided above for waiver of (FMP) prepared by the North Pacific
according to the Fishery Management prior notice and opportunity for public Fishery Management Council under
Plan for Groundfish of the Bering Sea comment. authority of the Magnuson-Stevens
and Aleutian Islands Management Area Fishery Conservation and Management
(FMP) prepared by the North Pacific This action is required by § 679.20 Act. Regulations governing fishing by
Fishery Management Council under and is exempt from review under U.S. vessels in accordance with the FMP
authority of the Magnuson-Stevens Executive Order 12866. appear at subpart H of 50 CFR part 600
Fishery Conservation and Management Authority: 16 U.S.C. 1801 et seq. and 50 CFR part 679.
Act. Regulations governing fishing by The A season apportionment of the
Dated: January 18, 2018.
U.S. vessels in accordance with the FMP 2018 Pacific cod total allowable catch
appear at subpart H of 50 CFR part 600 Emily H. Menashes, (TAC) allocated to catcher vessels
and 50 CFR part 679. Acting Director, Office of Sustainable greater than or equal to 60 feet (18.3m)
The A season apportionment of the Fisheries, National Marine Fisheries Service. LOA using pot gear in the BSAI is 7,770
2018 Pacific cod total allowable catch [FR Doc. 2018–01223 Filed 1–19–18; 4:15 pm] metric tons (mt) as established by the
(TAC) allocated to catcher/processors BILLING CODE 3510–22–P final 2017 and 2018 harvest
using pot gear in the BSAI is 1,387
daltland on DSKBBV9HB2PROD with RULES
specifications for groundfish in the
metric tons (mt) as established by the BSAI (82 FR 11826, February 27, 2017)
final 2017 and 2018 harvest and inseason adjustment (82 FR 60329,
specifications for groundfish in the December 20, 2017).
BSAI (82 FR 11826, February 27, 2017) In accordance with § 679.20(d)(1)(iii),
and inseason adjustment (82 FR 60329, the Administrator, Alaska Region,
December 20, 2017). NMFS (Regional Administrator), has
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Document Created: 2018-10-26 10:00:45
Document Modified: 2018-10-26 10:00:45
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective: January 24, 2018. | |
| Contact | Ms. Leah Price, GSA Acquisition Policy Division, Senior Policy Advisor, at [email protected] For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite GSAR Case 2016-G506. | |
| FR Citation | 83 FR 3275 | |
| RIN Number | 3090-AJ75 | |
| CFR Citation | 48
CFR
515 48 CFR 538 48 CFR 552 |
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